MANSFIELD -- Richland County may receive good financial news next week, based upon a positive credit rating teleconference Tuesday afternoon with S&P Global.
County commissioners are seeking to refund some long-term bonds and replace them with lower-interest notes, which could save more than $500,000 in interest payments over the next 17 years.
The bonds were initially sold in 2011 and 2013, related to the new county jail.
Commissioners Tony Vero, Marilyn John and Darrell Banks, along with county Auditor Pat Dropsey and Joseph Robertson, managing director of Hilltop Securities, spoke on the call with Steve Waldeck, S&P Global Ratings credit analyst.
Hilltop Securities handles the underwriting on the county's debt.
During the hour-long call, the county officials laid out the county's current stable financial situation, including a better-than-expected revenue forecast for 2019, a $4.8 million budget carryover and a $1.2 million unappropriated "rainy day" cash fund.
They also told Waldeck the local economy is "very strong" and has grown significantly in recent years.
"The main growth sectors are healthcare and manufacturing, while the government and education sectors provide consistent and non-cyclical employment," John said during the call.
Commissioners also pointed to the development of a five-year capital improvement plan, which has allowed them to pay cash for a new county voting system this year and also for the renovation and upgrade of the sheriff's department 911 offices and system.
"We haven't had to borrow money for these big expenditures," Vero said.
At the end of the call, Waldeck complimented the local officials for their presentation, which he described as "very well detailed." He said the final bond rating is based on the county's financial performance, as well as the overall economic outlook.
The county's current bond rating of "A+," with "a positive outlook" was established in January 2018. Waldeck said he will meet with the S&P ratings committee on Nov. 19 and then inform the county the same day.
According to the S&P website, a "credit rating is an educated opinion about an issuer’s likelihood to meet its financial obligations in full and on time."
It appears likely the county could move up a slot in the ratings, reaching "AA-." That could mean a significant difference in the bond sale, according to Robertson.
He said some in the bond market only purchase notes rated AA or higher. A bump upward would result in a bigger buyer group, more aggressive bids and a lower interest rate, Robertson said.
Commissioners, who initially discussed the idea in June, approved the plan in September after meeting again with Robertson.
Interest rates have consistently fallen during the last decade and Robertson said many governmental entities have achieved savings by refunding bonds issued at higher rates of interest and replacing them at lower rates. The county currently pays $1.5 million in annual debt payments related to these bonds.
Commissioners could, in the future, reduce that amount due to the lower interest rates and increase the amount of money available in the general fund.